Account Opening

With the Emirates’ financial outlook appearing so strong, it’s no surprise more and more foreign businesses are looking to incorporate or open offshore bank accounts in the UAE.

While the overall safety of banking in Dubai is attractive, opening a bank account in the emirate as an international company can present some hurdles. However, the process isn’t impossible, and many businesses start banking in Dubai every day.

What kinds of corporate entities exist in Dubai?

Under UAE law, five pathways for business establishment are applicable for foreign companies who are interested in creating a formal presence in Dubai:

1. Creating a permanent establishment
2. Establishing a branch office
3. Creating an entity in one of the UAE’s free zones
4. Creating a civil company
5. Entering a commercial agency agreement

Under the UAE Commercial Companies Law, companies established in any of the emirate’s must have at least one UAE national partner who holds a minimum of 51% of the company’s capital. However, some businesses may be exempted from the law, including those in the oil and gas industry, companies that produce electricity and gas, and companies involved in water treatment and distribution. Companies established in the free zone are also exempt from the 51% rule, as long as that zone has its own provisions for regulating the company.

There are seven methods for creating permanent establishments:

1. General Partnerships
2. Limited Partnerships
3. Joint Participation Ventures
4. Public Joint Stock Companies
5. Private Joint Stock Companies
6. Limited Liability Companies
7. Partnerships Limited with Shares

Companies wishing to establish a presence in Dubai may also create a branch office, which carries the same legal identity as the parent company. Branch offices may perform contracts or conduct other activities, as specified in its individual license.

Can a foreign entity open a corporate bank account in Dubai?

The UAE is not among the countries that participate in the Hague Convention of 1961-- meaning, the UAE does not recognize Apostille. Because that authentication is not valid in Dubai, the first step is having all necessary company documents certified at the Consulate of the Emirates in the country where the company is registered. Next, the documents must be certified by the UAE Ministry of Foreign Affairs. Certification at the UAE MFA costs roughly AED 2,000 per document, meaning the total cost of the certification process often costs $3000 USD or more. Beyond the price tag, the certification process can often take months.

Long story short-- a foreign entity may open a bank account in Dubai, however, incorporating in the UAE is often a much easier and more cost effective solution.

Once I’m incorporated or certified, what’s the process to open a corporate account?

The requirements for opening an account vary from bank to bank, but the presence of a major shareholder or director is typically required. Sometimes attorneys can set up accounts on their clients’ behalf, though this is not often the case.

To open an account, the first step is completing an account opening application, which will be supported by detailed company records. That information can include proof of business, like contracts and invoices, as well as information about the company’s clients and suppliers.

Though the list varies between banks, typically the required documents will include:

• The passport (with residency visa) of the company’s shareholder representative
• Copy of the Emirates ID card of the shareholder representative
• Passport copy of the company director
• Information about the type of activities on the account
• Disclosure of the source of funds
• Existing contracts